Exhibit 10.3
▇▇▇▇▇▇▇▇.▇▇▇, INC.
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Series B Convertible Preferred Stock Purchase Agreement (the
"Agreement") is entered into as of February 7th, 2000, by and among
▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company"), Sterling
Communication, Inc., a wholly owned subsidiary of the Company ("Sterling"), and
each of those persons and entities, severally and not jointly, whose names are
set forth on the Schedule of Purchasers attached hereto as Exhibit A (which
persons and entities are hereinafter collectively referred to as "Purchasers"
and each individually as a "Purchaser").
Recitals
Whereas, the Company has authorized the sale and issuance of an
aggregate of Two Million Two Hundred Eighty-Two Thousand Six Hundred Eighty-Four
(2,282,684) shares of its Series B Convertible Preferred Stock, par value $0.01
per share (the "Shares");
Whereas, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
Whereas, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein;
Now, Therefore, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, and covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase.
1.1 Authorization of Shares. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized (a) the sale and
issuance to Purchasers of the Shares and (b) the issuance of such shares of
Common Stock to be issued upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Amended and Restated
Certificate of Incorporation, in the form attached hereto as Exhibit B (the
"Certificate of Incorporation").
1.2 Sale and Purchase. Subject to the terms and conditions
hereof, the Company hereby agrees to issue and sell to each Purchaser, severally
and not jointly, and each Purchaser agrees to purchase from the Company,
severally and not jointly, the number of Shares set forth opposite such
Purchaser's name on Exhibit A, at a purchase price of $1.117106003284 per share.
2. Closing, Delivery and Payment.
2.1 Initial Closing. The initial closing of the sale and
purchase of the Shares under this Agreement (the "Initial Closing") shall take
place at 10:00 a.m. on the date hereof, at
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the offices of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other time or place as the Company and Purchasers may
mutually agree.
2.2 Delivery. At the Initial Closing or at the Subsequent Closing (as
defined in Section 2.3), subject to the terms and conditions hereof, the Company
will deliver to each Purchaser a certificate representing the number of Shares
to be purchased at the Initial Closing or the Subsequent Closing, as applicable,
by such Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company, cancellation of indebtedness
or any combination of the foregoing.
2.3 Subsequent Sales of Shares. At any time on or before thirty (30)
days following the Initial Closing, the Company may sell up to the balance of
the authorized shares of Series B Preferred Stock not sold at the Initial
Closing to such persons and entities as may be approved by the Board of
Directors of the Company (including one (1) director designated by Mid-Atlantic
Venture Fund III, L.P.); provided, that each Additional Investor shall be
required to execute an addendum to this Agreement substantially in the form
attached hereto as Exhibit C (the "Addendum"). All such sales shall be made on
the terms and conditions set forth in this Agreement, including, without
limitation, the representations and warranties by such Purchasers as set forth
in Section 4. All shares sold pursuant to this Section 2.3 shall be deemed to be
"Shares" for all purposes under this Agreement and any purchasers thereof shall
be deemed to be "Purchasers" for all purposes under this Agreement. The
subsequent closing of the sale and purchase of the Shares pursuant to this
Section 2.3 (the "Subsequent Closing") shall take place at the offices of ▇▇▇▇▇▇
Godward LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such
other place as the Company and the Additional Investors may mutually agree.
3. Representations and Warranties of the Company. For purposes of this
Section 3, all references to the Company shall include Sterling (other than
Sections 3.1, 3.3, 3.5, 3.16, 3.17, 3.21, 3.22, and 3.23). Except as set forth
on a Schedule of Exceptions delivered by the Company to the Purchasers at the
Initial Closing or the Subsequent Closing, as applicable, specifically
identifying the relevant Section hereof, the Company hereby represents and
warrants to each Purchaser as of the date of the Initial Closing and the
Subsequent Closing, as applicable, as follows:
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Investor Rights Agreement in the form attached hereto as
Exhibit D (the "Investor Rights Agreement"), the Right of First Refusal and
Co-Sale Agreement in the form attached hereto as Exhibit E (the "Co-Sale
Agreement"), the Voting Agreement in the form attached hereto as Exhibit F (the
"Voting Agreement"), the Employment Agreement in the form attached hereto as
Exhibit G (the "Employment Agreement"), and the Stock Restriction Agreement in
the form attached hereto as Exhibit L (the "Stock Restriction Agreement")
(collectively, the "Related Agreements"), to issue and sell the Shares and the
Conversion Shares, and to carry out the provisions of this Agreement, the
Related Agreements and the Certificate of Incorporation and to carry on its
business as presently conducted and as presently proposed to be conducted. The
Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in
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all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the Company or its business.
3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
3.3 Capitalization; Voting Rights.
(a) The authorized capital stock of the Company, immediately
prior to the Closing, will consist of 20,000,000 shares of Common Stock, par
value $0.01 per share, 9,747,962 shares of which are issued and outstanding and
1,481,954 shares of which are reserved for future issuance to employees pursuant
to the Company's 1999 Stock Incentive Plan and 2,951,466 shares of Preferred
Stock, 668,782 of which have been designated Series A Preferred Stock, and
2,282,684 of which will have been designated as Series B Preferred Stock.
(b) All issued and outstanding shares of the Company's Common
Stock and Preferred Stock (a) have been duly authorized and validly issued to
the persons listed on Exhibit H hereto, (b) are fully paid and nonassessable,
and (c) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.
(c) The rights, preferences, privileges and restrictions of the
Shares are as stated in the Certificate of Incorporation. Each series of
Preferred Stock is convertible into Common Stock on a one-for-one basis subject
to Adjustment (as defined in the Certificate of Incorporation). The Conversion
Shares have been duly and validly reserved for issuance. Other than the
1,481,954 shares reserved for issuance under the Company's 1999 Stock Incentive
Plan, and except as may be granted pursuant to the Related Agreements, there are
no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal), proxy or shareholder agreements, or
agreements of any kind for the purchase or acquisition from the Company of any
of its securities. Of the shares of Common Stock reserved for issuance under the
Company's 1999 Stock Incentive Plan, (i) options to purchase 388,000 shares have
been granted and are currently outstanding, and (ii) 1,093,954 shares of Common
Stock remain available for issuance to officers, directors, employees and
consultants pursuant to such 1999 Stock Incentive Plan. When issued in
compliance with the provisions of this Agreement and the Certificate of
Incorporation, the Shares and the Conversion Shares will be validly issued,
fully paid and nonassessable, and will be free of any liens or encumbrances;
provided, however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.
(d) No stock plan, stock purchase, stock option or other
agreement or understanding between the Company and any holder of any equity
securities or rights to purchase equity securities provides for acceleration or
other changes in the vesting provisions or other terms of such agreement or
understanding as the result of any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company.
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3.4 Authorization; Binding Obligations. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Initial Closing
and the Subsequent Closing, as applicable, and the authorization, sale, issuance
and delivery of the Shares pursuant hereto and the Conversion Shares pursuant to
the Certificate of Incorporation has been taken or will be taken prior to the
Initial Closing and the Subsequent Closing, as applicable. The Agreement and the
Related Agreements, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights,
(b) general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions in Section 2.9 of the Investor Rights Agreement may be limited by
applicable laws. The sale of the Shares and the subsequent conversion of the
Shares into Conversion Shares are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied
with.
3.5 Financial Statements. The Company has made available to each
Purchaser its unaudited balance sheet as at November 30, 1999 (the "Statement
Date") and unaudited consolidated statement of income and cash flows for the
eleven month period ending on the Statement Date (collectively, the "Financial
Statements"). The Financial Statements, together with the notes thereto, are
complete and correct in all material respects, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as disclosed therein, and present
fairly the financial condition and position of the Company as of November 30,
1999 and the Statement Date; provided, however, that the unaudited financial
statements are subject to normal recurring year-end audit adjustments (which are
not expected to be material), and do not contain all footnotes required under
generally accepted accounting principles.
3.6 Liabilities. The Company has no material liabilities and, to the
best of its knowledge, knows of no material contingent liabilities not disclosed
in the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date which have not been, either
in any individual case or in the aggregate, materially adverse.
3.7 Agreements; Action.
(a) There are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates
or any affiliate thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $10,000 (other than obligations of, or payments to, the
Company arising from purchase or sale agreements entered into in the ordinary
course of business), or (ii) the transfer or license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of "off the shelf" or other standard
products), or (iii) provisions restricting the development, manufacture or
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distribution of the Company's products or services, or (iv) indemnification by
the Company with respect to infringements of proprietary rights (other than
indemnification obligations arising from purchase or sale or license agreements
entered into in the ordinary course of business).
(c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in
excess of $10,000 or, in the case of indebtedness and/or liabilities
individually less than $10,000 or in excess of $25,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(e) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company, or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up, of the
Company.
3.8 Obligations to Related Parties. There are no obligations of the
Company to officers, directors, shareholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or shareholders of
the Company, or any members of their immediate families, are indebted to the
Company or have any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation which competes with the
Company, except that officers, directors and/or shareholders of the Company may
own stock in publicly traded companies which may compete with the Company. No
officer, director or shareholder, or any member of their immediate families, is,
directly or indirectly, interested in any material contract with the Company
(other than such contracts as relate to any such person's ownership of capital
stock or other securities of the Company). Except as may be disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
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3.9 Changes. Since the Statement Date, there has not been to the
Company's knowledge:
(a) Any change in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Financial
Statements, other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial condition, operations or
prospects of the Company;
(b) Any resignation or termination of any officer or key
employee of the Company; and the Company, to the best of its knowledge, does not
know of the impending resignation or termination of employment of any such
officer or key employee;
(c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(f) Any direct or indirect loans made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the
Company is a party or by which it is bound which materially and adversely
affects the business, assets, liabilities, financial condition, operations or
prospects of the Company;
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(m) Any other event or condition of any character that,
either individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company; or
(n) Any arrangement or commitment by the Company to do any
of the acts described in subsection (a) through (m) above.
3.10 Title to Properties and Assets; Liens, Etc. The Company has
good and marketable title to its properties and assets, including the properties
and assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent, (b) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company, and (c)
those that have otherwise arisen in the ordinary course of business. All
facilities, machinery, equipment, fixtures, vehicles and other properties owned,
leased or used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. The
Company is in compliance with all material terms of each lease to which it is a
party or is otherwise bound.
3.11 Patents and Trademarks.
(a) The Company owns or possesses sufficient legal rights to
all patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted, without
any known infringement of the rights of others. There are no outstanding
options, licenses or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any options, licenses or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or
agreements arising from the purchase of "off the shelf" or standard products.
(b) The Company is not aware of any allegations that the
Company has violated or, by conducting its business as presently proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity.
(c) The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company's business as presently
proposed to be conducted. Neither the execution nor delivery of this Agreement
or the Related Agreements, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as presently
proposed, will, to the Company's knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now obligated. The
Company does not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees made
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prior to their employment by the Company, except for inventions, trade secrets
or proprietary information that have been assigned to the Company.
(d) The Company is not aware of any claims by any other person or
entity contesting the validity, enforceability, use or ownership of any of the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted. The
Company is not aware of any infringement or misappropriation by any other person
or entity with respect to any of the patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary
rights and processes necessary for its business as now conducted and as
presently proposed to be conducted.
3.12 Compliance with Other Instruments.
(a) The Company is not in violation or default of any term of its
Certificate of Incorporation or Bylaws, or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound or of any judgment, decree, order, writ. The execution,
delivery, and performance of and compliance with this Agreement, and the Related
Agreements, and the issuance and sale of the Shares pursuant hereto and of the
Conversion Shares pursuant to the Certificate of Incorporation, will not, with
or without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or result in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any right granted under any license, distribution agreement or other agreement
to which the Company is a party if such loss would have a material adverse
effect on the assets, condition, affairs, or prospects of the Company,
financially or otherwise.
3.13 Litigation. There is no action, suit, proceeding or investigation
pending or to the Company's knowledge currently threatened against the Company
or its officers that questions the validity of this Agreement, or the Related
Agreements or the right of the Company to enter into any of such agreements, or
to consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for any of the foregoing. The
foregoing includes, without limitation, actions pending or threatened (or any
basis therefor known to the Company) involving the prior employment of any of
the Company's employees, their use in connection with the Company's business of
any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government
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agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company currently pending or which the Company intends to initiate.
3.14 Tax Returns and Payments. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Company's knowledge all other taxes due and payable by the Company on or before
the Initial Closing and the Subsequent Closing, as applicable, have been paid or
will be paid prior to the time they become delinquent. The Company has not been
advised (a) that any of its returns, federal, state or other, have been or are
being audited as of the date hereof, or (b) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.
3.15 Employees. The Company has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending or, to
the Company's knowledge, threatened with respect to the Company. The Company is
not a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the Company's knowledge the continued employment by the Company of its
present employees, and the performance of the Company's contracts with its
independent contractors, will not result in any such violation. The Company has
not received any notice alleging that any such violation has occurred. No
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. The Company is not aware that any officer or key employee, or
that any group of key employees, intends to terminate his, her or their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer, key employee or group of key employees.
3.16 Assignment of Inventions, Non-Disclosure and Non-Competition
Agreements. Each former and current employee, officer and consultant of the
Company has executed an Assignment of Inventions, Non-Disclosure and
Non-Competition Agreement in the form of Exhibit I attached hereto. No current
employee, officer or consultant of the Company has excluded works or inventions
made prior to his or her employment with the Company from his or her assignment
of inventions pursuant to such employee, officer or consultant's Assignment of
Inventions, Non-Disclosure and Non-Competition Agreement.
3.17 Obligations of Management. Each officer of the Company is currently
devoting one hundred percent (100%) of his or her business time to the conduct
of the business of the Company. The Company is not aware that any officer or key
employee of the Company is planning to work less than full time at the Company
in the future. No officer or key employee is currently working or, to the
Company's knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.
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3.18 Registration Rights and Voting Rights.
(a) Except as required pursuant to the Investor Rights Agreement,
the Company is presently not under any obligation, and has not granted any
rights, to register (as defined in Section 1.1 of the Investor Rights Agreement)
any of the Company's presently outstanding securities or any of its securities
that may hereafter be issued.
(b) To the Company's knowledge, except as contemplated in the
Voting Agreement, no shareholder of the Company has entered into any agreement
with respect to the voting of equity securities of the Company.
3.19 Compliance with Laws; Permits. The Company is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares or
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Initial
Closing and the Subsequent Closing, as applicable, as will be filed in a timely
manner. The Company has all franchises, permits, licenses and any similar
authority necessary for the conduct of its business as now being conducted by
it, the lack of which could materially and adversely affect the business,
properties, prospects or financial condition of the Company and believes it can
obtain, without undue burden or expense, any similar authority for the conduct
of its business as planned to be conducted.
3.20 Environmental and Safety Laws. To the Company's knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation. No Hazardous Materials (as
defined below) are used or have been used, stored, or disposed of by the Company
or, to the Company's knowledge after reasonable investigation, by any other
person or entity on any property owned, leased or used by the Company. For the
purposes of the preceding sentence, "Hazardous Materials" shall mean (a)
materials which are listed or otherwise defined as "hazardous" or "toxic" under
any applicable local, state, federal and/or foreign laws and regulations that
govern the existence and/or remedy of contamination on property, the protection
of the environment from contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building materials, or (b)
any petroleum products or nuclear materials.
3.21 Offering Valid. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any
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agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Shares to any
person or persons so as to bring the sale of such Shares by the Company within
the registration provisions of the Securities Act or any state securities laws.
3.22 Full Disclosure. The Company has provided the Purchasers with
all information requested by the Purchasers in connection with their decision to
purchase the Shares, including all information the Company believes is
reasonably necessary to make such investment decision. Neither this Agreement,
the Exhibits hereto, the Related Agreements nor any other document delivered by
the Company to Purchasers or their attorneys or agents in connection herewith or
therewith or with the transactions contemplated hereby or thereby, contain any
untrue statement of a material fact nor, omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading.
Notwithstanding the foregoing, the Business Plan, dated November 1999 (the
"Business Plan") provided to each of the Purchasers was prepared by the
management of the Company in a good faith effort to describe the Company's
presently proposed business and products and the markets therefor. The
assumptions applied in preparing the Business Plan appeared reasonable to
management as of the date thereof and as of the date hereof; however, there is
no assurance that these assumptions will prove to be valid or that the
objectives set forth in the Business Plan will be achieved. To the Company's
knowledge, there are no facts which (individually or in the aggregate)
materially adversely affect the business, assets, liabilities, financial
condition, prospects or operations of the Company that have not been set forth
in the Agreement, the Exhibits hereto, the Related Agreements or in other
documents delivered to Purchasers or their attorneys or agents in connection
herewith.
3.23 Minute Books. The minute books of the Company made available to
the Purchasers contain a complete summary of all meetings of directors and
shareholders since the time of incorporation.
3.24 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended (the "Code") and any regulations
promulgated thereunder.
3.25 Insurance. The Company has general business liability, fire and
casualty insurance policies with coverage customary for companies similarly
situated to the Company.
3.26 Tax Elections. The Company has not elected to be treated as an
"S" corporation or a collapsible corporation pursuant to Section 341(f) or
Section 1362(a) of the Code, nor has it made any other elections pursuant to the
Code (other than elections which relate solely to matters of accounting,
depreciation or amortization) which would have a material adverse effect on the
Company, its financial condition, its business as presently conducted or its
present properties or material assets.
3.27 Year 2000 Compatibility. All of the Company's proprietary
software has been designed and tested for use before, during and after January
1, 2000, and will, when used in accordance with its documentation, operate
(i.e., receive, record, store, process, calculate, manipulate and output dates)
during such period without error or ambiguity relating to calendar date data,
including, without limitation, any error relating to or resulting from calendar
date data
11
that represent or references different centuries or more than one century or
leap years; provided, however, that the foregoing warranty shall not apply to
the extent that any failure properly to so operate arises from the incorrect
operation of non-Company software or the incorrect or ambiguous input of data to
the Company software.
4. Representations And Warranties Of The Purchasers. Each Purchaser
hereby represents and warrants to the Company, severally and not jointly, as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and the Related Agreements and to carry out their
provisions. All action on Purchaser's part required for the lawful execution and
delivery of this Agreement and the Related Agreements have been or will be
effectively taken prior to the Initial Closing or the Subsequent Closing, as
applicable. Upon their execution and delivery, this Agreement and the Related
Agreements will be valid and binding obligations of Purchaser, enforceable in
accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, (b) general principles of equity
that restrict the availability of equitable remedies, and (c) to the extent that
the enforceability of the indemnification provisions of Section 2.9 of the
Investor Rights Agreement may be limited by applicable laws.
4.2 Investment Representations. Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser's representations contained in the Agreement. Purchaser
hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.
12
(c) Purchaser Can Protect Its Interest. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement.
(d) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has received and read the
Financial Statements and Business Plan and has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(f) Rule 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
(g) Residence. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on Exhibit A; if the Purchaser is a partnership,
corporation, limited liability company or other entity, then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on Exhibit A.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees
that the Shares and, if issued, the Conversion Shares are subject to
restrictions on transfer as set forth in the Investor Rights Agreement.
5. Conditions To Closing.
5.1 Conditions to Purchasers' Obligations at the Closing. Each of
the Purchasers' obligations to purchase the Shares at the Initial Closing or the
Subsequent Closing, as applicable, are subject to the satisfaction, at or prior
to such date, of the following conditions:
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by the Company in Section 3
hereof shall be true and correct as of the Initial Closing or the Subsequent
Closing, as applicable, with the same force and effect as if they had been made
as of such date and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to such
date; provided, however, the Company shall provide an updated Schedule of
13
Exceptions to the representations and warranties made by the Company in Section
3 hereof at the Subsequent Closing.
(b) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Initial Closing or the Subsequent Closing, as applicable).
(c) Filing of Certificate of Incorporation. The Certificate
of Incorporation shall have been filed with the Secretary of State of the State
of Delaware and shall continue to be in full force and effect as of the Initial
Closing or the Subsequent Closing, as applicable.
(d) Corporate Documents. The Company shall have delivered to
Purchasers or their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.
(e) Reservation of Conversion Shares. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
(f) Compliance Certificate. The Company shall have delivered
to the Purchasers a Compliance Certificate, executed by the President of the
Company, dated the Initial Closing, to the effect that the conditions specified
in subsections (a), (b), (c) and (e) of this Section 5.1 have been satisfied.
(g) Investor Rights Agreement. The Investor Rights Agreement
shall have been executed and delivered by the parties thereto. The stock
certificates representing the shares subject to the Investor Rights Agreement
shall have been delivered to the Secretary of the Company and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth in the Investor Rights Agreement.
(h) Right of First Refusal and Co-Sale Agreement. The Co-Sale
Agreement shall have been executed and delivered by the parties thereto. The
stock certificates representing the shares subject to the Co-Sale Agreement
shall have been delivered to the Secretary of the Company and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth in the Co-Sale Agreement.
(i) Voting Agreement. The Voting Agreement shall have been
executed and delivered by the parties thereto. The stock certificates
representing the shares subject to the Voting Agreement shall have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed upon them to reflect the restrictions on transfer set forth in the Voting
Agreement.
(j) Employment Agreement. The Employment Agreement shall have
been executed and delivered by the parties thereto. The stock certificate
representing the shares subject to the Employment Agreement shall have been
delivered to the Secretary of the
14
Company and shall have had appropriate legends placed upon them to reflect the
restrictions on transfer set forth in the Employment Agreement.
(k) Stock Restriction Agreement. The Stock Restriction
Agreement shall have been executed and delivered by the parties thereto. The
stock certificate representing the shares subject to the Stock Restriction
Agreement shall have been delivered to the Secretary of the Company and shall
have had appropriate legends placed upon them to reflect the restrictions on
transfer set forth in the Stock Restriction Agreement.
(l) Board of Directors. Upon the Initial Closing, the
authorized size of the Board of Directors of the Company shall be seven (7)
members and the Board shall consist of, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Sr., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and one
(1) individual to be designated after the date hereof pursuant to the Voting
Agreement.
(m) Legal Opinion. The Purchasers shall have received from
legal counsel to the Company an opinion addressed to them, dated as of the
Initial Closing, in substantially the form attached hereto as Exhibit J.
(n) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchasers and their special counsel,
and the Purchasers and their special counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request. Such documents shall include (but not be limited to) the
following:
(1) Certified Charter Documents. A copy of the
Company's Certificate of Incorporation (certified by the Delaware Secretary of
State) and Bylaws, as amended, certified by the Secretary of the Company as true
and correct as of each Closing.
(2) Secretary's Incumbency Certificate. A certificate
of the Secretary or an Assistant Secretary or other officer of the Company
certifying the names of the officers of the Company authorized to sign this
Agreement and the other documents, instruments or certificates to be delivered
pursuant to this Agreement by the Company or any of its officers, together with
the true signatures of such officers.
(3) Corporate Actions. A copy of the resolutions of the
Board of Directors and, if required, the stockholders of the Company evidencing
the approval of this Agreement and the Related Agreements, the election of the
Board of Directors and the other matters contemplated hereby, certified by the
Secretary of the Company to be true, complete and correct.
(4) Good Standing Certificate. A good standing
certificate issued by the Delaware Secretary of State and any other state where
the Company is qualified to do business dated within fifteen (15) days prior to
the Initial Closing.
15
(o) Assignment of Inventions, Non-Disclosure and
Non-Competition Agreement. The Company and each of its former and current
employees, officers and consultants, shall have entered into the Assignment of
Inventions, Non-Disclosure and Non-Competition Agreement.
(p) Due Diligence. The Purchasers shall have completed, to
their sole satisfaction, their due diligence review of the Company.
(q) "Key Man" Life Insurance. The Company shall have obtained
"key man" life insurance in the amount of $4,000,000 on the life of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, with $2,000,000 of proceeds payable to the Company and $2,000,000 of
proceeds payable to the estate of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
(r) Domain Transfer Agreement. The Domain Transfer Agreement
in the form attached hereto as Exhibit M shall have been executed and delivered
by the parties thereto.
(s) Amended and Restated Bylaws. The Company shall have duly
adopted the Amended and Restated Bylaws in the form attached hereto as Exhibit
N.
5.2 Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Shares at the Initial Closing or the Subsequent
Closing, as applicable, to each Purchaser is subject to the satisfaction, on or
prior to such Closing, of the following conditions:
(a) Representations and Warranties True. The representations
and warranties in Section 4 made by such Purchaser shall be true and correct at
the date of the Initial Closing or the Subsequent Closing, as applicable, with
the same force and effect as if they had been made on and as of said date;
provided, however, the Company shall provide an updated Schedule of Exceptions
to the representations and warranties made by the Company in Section 3 hereof at
the Subsequent Closing.
(b) Performance of Obligations. Such Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by such Purchaser on or before the Initial Closing or
the Subsequent Closing, as applicable.
(c) Filing of Certificate of Incorporation. The Certificate
of Incorporation shall have been filed with the Secretary of State of the State
of Delaware.
(d) Investor Rights Agreement. The Investor Rights Agreement
shall have been executed and delivered by such Purchaser.
(e) Co-Sale Agreement. The Co-Sale Agreement shall have been
executed and delivered by such Purchaser.
(f) Voting Agreement. The Voting Agreement shall have been
executed and delivered by such Purchaser.
16
(g) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Initial Closing or the Subsequent Closing, as applicable).
5.3 Covenants of the Company.
(a) Within 30 days of the Initial Closing, the Company hereby
covenants and agrees to take all action necessary to enter into a Fulfillment
Agreement (the "Fulfillment Agreement") with Sterling Cellular, Inc., a Maryland
corporation ("Sterling Cellular") with respect to product fulfillment by the
Company of orders taken by Sterling Cellular during the term of such agreement.
The Fulfillment Agreement shall be entered into on an arms' length basis and
shall include, without limitation, the matters summarized on Exhibit K.
(b) In the event for any reason the Fulfillment Agreement is
not entered into prior to such 30-day period, the Purchasers shall have the
right (but not the obligation) to sell to the Company all of, or a portion of,
the Shares. The price per share at which such Shares are to be re-purchased by
the Company shall be equal to the price per share paid by the Purchaser pursuant
to Section 1.2 hereof plus all accrued but unpaid dividends through the date of
such re-purchase. In connection with the exercise of the put option created
hereby, each Purchaser shall deliver to the Company the certificate or
certificates representing the Shares to be sold, each certificate to be properly
endorsed for transfer.
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be construed under Delaware
General Corporation Law as to matters of corporate law and, as to all other
matters of law, shall be governed and construed under the laws of the State of
Maryland as such laws are applied to agreements between Maryland residents
entered into and performed entirely in Maryland.
6.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and no party shall be liable or bound
to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
17
6.5 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only by the
written consent of the Company and holders of at least fifty-one percent (51%)
of the Shares (treated as if converted and including any Conversion Shares into
which the Shares have been converted that have not been sold to the public).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under the Agreement may be
waived only with the written consent of the holders of at least fifty-one
percent (51%) of the Shares (treated as if converted and including any
Conversion Shares into which the Shares have been converted that have not been
sold to the public).
(c) The sale of Shares pursuant to Section 2.3 and the
execution and delivery of the Addendum shall not be deemed an amendment or
modification to this Agreement.
6.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Certificate of Incorporation, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on any
Purchaser's part of any breach, default or noncompliance under this Agreement,
the Related Agreements or under the Certificate of Incorporation or any waiver
on such party's part of any provisions or conditions of the Agreement, the
Related Agreements, or the Certificate of Incorporation must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, the Related Agreements, the
Certificate of Incorporation, the Bylaws, or otherwise afforded to any party,
shall be cumulative and not alternative.
6.8 Notices. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth on the signature page hereof and to a Purchaser at
the address set forth on Exhibit A attached hereto or at such other address as
the Company or such Purchaser may designate by ten (10) days advance written
notice to the other parties hereto.
6.9 Expenses. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement. The
18
Company shall, at the Initial Closing and within a reasonable time after the
Subsequent Closing, if applicable, reimburse the reasonable fees and expenses of
special counsel for the Purchasers, ▇▇▇▇▇▇ Godward LLP, not to exceed $25,000,
incurred in connection with the negotiation, execution, delivery and performance
of this Agreement, the Related Agreements and the transactions contemplated by
such agreements.
6.10 Attorneys' Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
6.11 Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
6.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.13 Broker's Fees. Each party hereto represents and warrants that
no agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein, other than Davidson Capital Group LLC, to
whom the Company shall issue 538,893 shares of the Common Stock of the Company.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 6.13 being untrue.
6.14 Exculpation Among Purchasers. Each Purchaser acknowledges that
it is not relying upon any person, firm, or corporation, other than the Company
and its officers and directors, in making its investment or decision to invest
in the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Shares and Conversion Shares.
6.15 Confidentiality. Each party hereto agrees that, except with the
prior written consent of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement or the Related Agreements,
discussions or negotiations relating to this Agreement or the Related
Agreements, the performance of its obligations hereunder or the ownership of the
Shares purchased hereunder. The provisions of this Section 6.15 shall be in
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto.
19
6.16 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
6.17 Ongoing Expenses. Following the Initial Closing, reasonable
out-of-pocket expenses incurred by the Purchasers or their representatives on
behalf of the Company at its request, including reasonable out-of-pocket
expenses associated with attendance at meetings of the Board of Directors, shall
be borne by the Company.
6.18 Mutual Drafting. This Agreement is the result of the joint
efforts of the Company and each of the Purchasers, and each provision hereof has
been subject to the mutual consultation, negotiation and agreement of the
parties and there shall be no construction against any party based on any
presumption of that party's involvement in the drafting thereof.
[SIGNATURE PAGES FOLLOW]
20
In Witness Whereof, the parties hereto have executed the Series B
Convertible Preferred Stock Purchase Agreement as of the date set forth in the
first paragraph hereof.
Company:
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Address: ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Series B Convertible Preferred Stock Purchase Agreement
Sterling Communication, Inc. *
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________________
Print Name:_______________________________
Title:____________________________________
Address: c/o ▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
22.
Purchasers:
Mid-Atlantic Venture Fund III, L.P.
By: MAVF III Partners, L.P., its General Partner
By: MAVF III GP, Inc., its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________________________________
Print Name:________________________________________
Title:_____________________________________________
23.
RAF NetVentures, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________________________
Print Name:___________________________________________
Title:________________________________________________
________________
* Signing for purposes of Section 3 only.
24.